While India Inc is
not too impressed with the the modified land acquisition Bill
cleared by the Sharad Pawar-led group of ministers (GoM) on
Tuesday, land rights activists have termed it as a retrograde
step aimed at facilitating transfer of precious natural
resources to private corporations, which will fuel conflicts in
the country.

Despite the promise
of greater transparency and better regulation, corporate India
is worried about cost. While companies are bracing for increased
costs and may tweak project plans, but they?re unlikely to ditch
projects altogether, having invested years negotiating with
state governments and landowners.

As per the new
draft, companies can take possession of acquired land before
they complete the resettlement and rehabilitation of affected
families, though it is unclear whether the resettlement
requirement has been waived off completely for purely private
projects.

The bill will be
placed before Parliament in the Winter session.

The bill will be
placed before Parliament in the Winter session. Reuters

Ficci president RV
Kanoria told CNBC-TV18 the bill should not have any
retrospective effect on land acquisitions already initiated. The
bill initially provided for retrospective application of the law
in cases where the land had not been awarded or where
compensation had not been paid but the rural development
ministry dropped this clause to make it prospective and
industry-friendly.

According to the
recommendations of the GoM, the bill will no longer have a
retrospective effect. Instead, there will be a cut-off date for
implementation of its provisions, to be decided later.

Moreover, as per the
modified land acquisition Bill, the consent of two-thirds or 66
percent of landowners would be enough, against the earlier
consent of 80 percent people for acquiring land for
public-private partnership (PPP) and private projects.
Firstpost?s R Jagannathan had said earlier, ?if land is going to
be made horrendously expensive and difficult to acquire for
industry, residential housing and infrastructure, private
parties involved in these activities will use bribery to achieve
these ends. They will use criminals to manufacture rural
consent, and employ corrupt practices to get their prices
accepted and validated if the Land Bill becomes law.?

Secondly, the
compensation will be two times the market value of land in urban
areas and four times the value of land in rural areas, a step
down as compared with two to six times required earlier. This is
over and above the costs to be incurred in rehabilitation and
resettlement of the people selling or dependent on the land
being acquired.

Despite these
changes, corporate India feels the Bill would inflate the cost
of acquiring land for infrastructure projects. And why shouldn?t
they? As Firstpost had said earlier, ?by artificially inflating
compensation for land at the primary level, it skews the
economics of land pricing ? and renders the process of land
acquisition for industrial activity more complex and expensive.
It will effectively negate the government?s intention to ramp up
manufacturing activity in order to create jobs. Over time, it
will also slow down economic activity even further.? Such
complexities in return could dampen demand for land ? and have
the effect of tying farmers to their land in remunerative and
unproductive agricultural activity.

?Ficci has always
maintained that wherever land is acquired by private parties
directly, there should not be any kind of compensation or
solution in excess of the value of the land,? said Kanoria.
Neither is the industry group in favour of market-determined
pricing of land.

However, the real
estate industry is divided over the the reduction in consensus
of 80 percent land owners to 66 percent. While the president of
the developers body NAREDC has said the bill will make land
aggregation process simpler, Raheja and DLF are of the view that
compensation offered to land owners in the proposed bill would
increase project cost.

?The compensation
amount of 2X for urban areas and 4X for rural areas is going to
increase the cost of establishing projects. To benefit a
particular segment of land owners, this cost would be borne by
every Indian which should actually be reviewed and rethought
once again,? Raheja told PTI.

DLF Group Executive
Director Rajeev Talwar told Business Standard that ?When land
prices go up, it will push up project costs by many times over,
as land constitutes a big portion of any project cost. You will
not see big projects now. Not many developers will be willing to
launch large projects as not many can afford resettlement and
rehabilitation? .

CREDAI President
Lalit Jain said the consent formula arrived by the GoM is
?acceptable? but added that determination of price should be
based on negotiations between buyers and sellers.

Meanwhile, the
activists have slammed the Group of Ministers for allowing land
acquisition for the private and PPP projects which, they said,
are nothing but a loot of natural resources and would deprive
the nature resource-based communities of their livelihood . They
said the Government has failed to learn lessons from the past
failures related to resettlement and rehabilitation of displaced
of Bhakra dam and Sardar Sarovar project that led to withdrawal
of World Bank.

PV Rajagopal,
founder and president of Ekta Parishad told Firstpost that the
biggest problem with the bill is that it refuses to see the
sufferings of the people. ?It is more progressive than the first
one. But again, it is not a land redistribution bill, it is a
land acquisition bill. That is my problem ? without considering
land redistribution as a major agenda, the government is
acquiring land for industry,? he told Firstpost.